Mortgage Protection Life Insurance

You may choose to have either a single life or joint life plan.  Depending on the number of lives the sum assured will be paid out if:

For a single life plan
* You die before the end of the plan term, or
* In some cases you develop a terminal illness at least eighteen months before the end of the plan term

For a joint life plan
* Either of you dies before the end of the plan term, or
* In some cases either of you develops a terminal illness at least eighteen months before the end of the plan term.

The sum assured reduces each month, during the plan term.  It is calculated to be always equal to the capital which would be outstanding under a standard repayment mortgage. This mortgage is assumed to be for a loan equal to the starting sum assured and the rate of interest on it is assumed to be fixed at or above a predetermined rate per annum.  In some cases the Insurer guarantees repayment of the outstanding balance no matter what the rate, provided there are no arrears on the account.  If your plan has been assigned to a Lender, the assignment conditions may not automatically allow you to benefit personally if the sum assured is paid out because of a terminal illness.

If at the end of the plan term the sum assured has not become payable, the plan ends and nothing is paid out.

WHAT COUNTS AS A TERMINAL ILLNESS WHERE THIS IS INCLUDED WITH THE PLAN?

* It is an illness that is expected to cause death within 12 months
* You need to advise the insurer about it at least 18 months before the end of the plan term
You must be resident in the UK or certain other countries.